September is historically a weaker month for U.S. stock markets. Despite positive news on unemployment and retail sales, markets took a breather for the first half of the month and posted modest losses across the board.
The overall labor market reported mixed results: while unemployment for the month of August dropped, from 5.4% to 5.2%, the corresponding job creation numbers were surprisingly low. August numbers came in at 235,000 new jobs created. By comparison, June reported 962,000 new jobs, and July numbers rose to 1.1 million.
Newly released August retail sales numbers surprised the market. While most economists surveyed expected a 0.8% decline, initial reports show a 0.7% rise, However, revision of the July sales numbers showed a 1.8% decline, rather than the initially reported 0.5% increase.
Clearly, the market is sifting through mixed data. The persistence of the Delta Variant of COVID 19 is likely driving much of the pessimism as markets (and investors) search for direction moving forward.
Victoria Fernandez, chief market strategist at Crossmark Global Investments summed this up, “People are starting to see that some of the economic data that we’ve received lately has been affected by delta and are probably waiting for some of the effects of that to roll off. I think we’re going to see a little bit of ‘two steps forward, one step back in the markets over the next few weeks.”
As of September 15th, market returns were modestly lower. The Dow Jones Industrial Average (Dow) posted a decline of 546 points (1.55%), the S&P 500 shed 42 points (0.93%) and the NASDAQ Composite Index (NASDAQ) dropped 98 (0.64%).